Barb Van Stensel, Realtor - Chicago, Illinois

Hey Chicago, I am not too happy about what I just read over the internet, but the figure of $2 Trillion was lost in the last 15 months for retirement accounts. That's coming from Congress' top budget analyst.

I never intended to retire at 65 but was hoping I could continue until 75 and then retire. But that's just me - little miss workaholic. But for most and some of my clients, this is kind of important and to find out that you can't afford to retire isn't the kind of news that I like hearing. My "little sister" is a school teacher - where's her money that she's invested so far, gone to? My cousin works at a major brokerage and has stock in the company and is loosing his shirt but needs to support the company.

Today is not a happy day for me but I am thankful that my Dad and Mom invested heavily into real estate. That has always been a saving grace for our family during rough and tough times.

But before we get too upset let remind you of a few events in our history:

The real estate market has shifted drastically and dramatically. Sales volume and the number of transactions had trailed right behind. Inventory had skyrocketed beyond belief. Buyers were just a handful and it was like pulling teeth to get them to buy. This was around the oil crisis. I remember my brother calling me up from Grand Rapids, Michigan and asking me what I thought about Chrysler Stock at $5 a share and should we take a gamble? 1979 was the year this happened.

It happened again in 1987! Only this time it was due to the changing tax laws that had the disastrous effect. I remember this one because I was doing some serious appraising and overnight, like somebody just turned the switch off and homes in Northbrook dropped $40K in value - overnight! I won't forget it.

If anybody remembers the tale for the 1990's just give me your input because it happened again.

SHOW ME THE MONEY, HONEY!

And now we are in 2008 and it's been going on since around 2004 but we are in the thick of this financial mess. But the good part is that interest rates are around 6% and not 18% like in 1979! Underwriting for financing is more realistic and back to where it needs to be.

If handled properly, real estate is still one of the best investments for your retirement.

Hey Chicago, here's the schedule for the next group of forums and their locations:

OCTOBER 22ND: Evaluating Short Sales

LOCATION: Bridgeview Bank
4553 N. Lincoln Avenue

TIME: 6:30 P.M.

This forum will be about analyzing the market for condos, 2-4 unit, single family homes with a serious punch list of what to look for when you are in the short sale property.

TO REGISTER FOR THIS FORUM: Bridgeview Bank Group, Asa Luke, Branch Manager at 773.989.2370

Tuesday, OCTOBER 28th - WHERE'S THE MONEY, HONEY?!!!!

LOCATION: Keller Williams Lincoln Square
4601 N. Western Avenue
Chicago, Illinois 60625

TIME: 6:30 P.M.

This forum will be a broad spectrum of understanding how to increase your rental income, to finding ways to create wealth to fund your (a) child's college education; and (b) you have to retire some time. A humerous but serious look at the real estate world as it stands today.

TO REGISTER FOR THIS FORUM: Email: BarbVan@kw.com or text Barb at (773) 746-5395 for registration.

Both of these forums will be eye openers. These are forums and we challenge you to bring your questions and paperwork.

As always, a light and nice dinner will be provided at both events.

I walked into my office to find a fax on my desk from a mortgage broker, here in Chicago stating the following:

"14 out of 15 mortgages in the US as of the end of August 2008 are current with their monthly principal and interest mortgage payment. "

So when do you breath? First off, know that approximately 35% of the Americans own their homes "free and clear". That's a big one!

Secondly, the percentage of those who are in default are from is a smaller percentage but we have job layoffs, credit card crunches with interest rates hitting 30% ..... and so, it will boil down to which bill to pay and which ones not to pay and hence I see about two more tidal waves hitting the default sector.

Thirdly, know and understand that we have to get our spending under control. We have to start having budgets in place and sticking to them. We need to have 401(k)'s, savings accounts for those little emergencies instead of the good old credit card which is charging obscene amounts of interest. One of the reasons why some of you are being charged this high interest rate because you can't stop spending within your means.

The definition of spending within your means: To be able to pay the bill in full at the end of the month. If you can't, you're out of control.

The reason for the fallout on the bailout was to get DC to understand that Americans are beginning to pay attention and are understanding that we have to make those in charge of our economy to be accountable. Will Wall Street be accountable? Nope. But they now know that people are paying more attention. that's a beginnning.......

We have a bailout coming but unless the underwriting guidelines are tightened up even more, that bailout could be a fallout down the road.

Besides being a Realtor, I am a strategist. In order for the proper channels to understand how America feels about what has happened with the economy, I used the illustration of the Super Bowl. Brady kept throwing to "25" but he was having an off day. #25 kept dropping the ball or missing it. One would think after the two incompletes that the sidelines would catch on. They didn't. So, in order for the "troops" to understand America's trust factor: I said the Government was Brady and #25, well that was the American people. See, America hasn't had a high trust factor and hence when a new program or concept was thrown to them, what do you think they did? They wouldn't do what happened to #25 - incompletes. Or, to be quite frank - they wouldn't accept this new program as nothing our Government was being accepted by the people.

In steps Eli Manning. Low profile but up and coming name. He won the Super Bowl because his passes were in 10 yard segments. When I was watching it, I thought - America just might accept changes in smaller dosages with someone not so prominant as our President, but someone with simplicity and a low profile like Manning. It was suggested that changes be made in small dosages so that America would adjust slowly instead of these grand ideas that either made it or fell through the cracks.

The one thing I am so proud of is that the American people have realized that they were sold a "bill of goods" that may or may not have been explained to them so that they could understand the long term consequences. When one looks at the fact that under these old programs the consumer could purchase a property with just dollars in their checking account, now impulse and desire outflanks reality. to the point of a tidal wave. Just like a car accident, there is a broad spectrum of responsibility that lies all the way across the globe and with each defaulting file the responsibility of failure will change.

The next thing I am proud of America is that they are no longer listening to the media as much. They are taking the information and making their own informed decisions and its about time.

But right now we are facing a bailout. One of the things that I believe when I speak about real estate options is to force our government to set some strong boundaries. Here's some suggestions that have come up and I want to share them with you.

If the subject property is a 2-4 unit property and this is the first time the buyer(s) have ever owned an investment property, they need to take certification classes in understanding:

Debt Service Ratios
Property Management
City Ordinances regarding Tenants and Landlord rights
Handling Tenant Issues

I believe that with the Debt Service Ratio, that when the appraiser figures out the remaining life of the roof, the furnace, hot water tanks, appliances, etc., that those monies of the cost vs. the remaining life should be caculated and it should be required that the buyer have sufficient funds based on the appraisers estimates. This is in addition to the number of mortgage payments that the lender would be required to insure that there is sufficient monies to back (x) amount of months of mortgage payments that would require the buyer to qualify for this building.

I believe that the building needs to qualify under the current rents and supported by receipts for the last six months as well as leases. The appraisers right now can estimate what the market rent should be but if the new buyer's can't understand or don't care, I feel that has been an area where we have a high default in investment properties. So, the property value can be based upon market rents but the current rents are the foundation for qualifying the buyer and if the current rents cannot qualify the buyer, then the buyer either needs to put more money down, change programs where the mortgage payment is less but won't adjust like a wild bandit leaving the buyer in dire straights.

If the property has problems that are disclosed by the seller and/or the house inspector or City Governing Inspection, a credit can go to the buyers. HOWEVER, this credit will be held in escrow with the Title Company as they can be governed more then Attorneys. I am not here to offend people but there is responsibility all across the board to our mess and it includes Attorneys, as well. A title company is accountable on paper and since they handle distributions of monies for new construction, they would be the obvious choice to handle the distribution of funds to insure that the property gets up to grade by a licensed contractor versus a hobbiest. When the inspection is done, only then can the licensed contractor receive his monies. Plain and simple but accountable. This way, those monies repair or replace what was needed to be addressed and those monies weren't shuffled under the table, or spent on a kids pool, closing closts, etc.

These are just a few "suggested" guidelines that have been submitted and I feel will help us float to the surface where the waters shouldn't be so violent. People will sqwuak about the changes but that's because they were spoiled.

It's about accountability and it's about time we started.

Just my two cents.

I got this yesterday from History.com and it was pretty moving and compelling. Alot of innocent people were murdered on 9/11. They were not in the service defending our country but normal everyday people. I hope this link works. Take a moment, reflect, pray and go home and hug your wife and kids.

http://emailnewsletters.aetv.com/h/images/!History/news/hosted_2008_0910.htm?HPF_rid=1411539&HPF_mid=1530_T1_Url0